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UC-NRLF 


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GIFT   OF 


0}        t-C*-0-*-->'  < 


feTrue  Sitoa.     j  Washington 

with  regard  to  the 

ite  Managed  Workmen's  Com- 
pensation Fund. 


By  G.  H.  Driggers,  Secretary 
Idaho  Employers'  Protective  Service  Bureau 


THE   MARKET  WORLD 

80  Wall  Street,  New  York 


he  Truth  About  Washington's 
State  Managed  Workmen's 
Compensation   Fund. 

\n  Address  Before  the  Committees  on  Labor  and 
Capital  of  the  Montana  State  Legislature  at 
Helena,  February  6,  I9I3. 


Mr.  Chairman,  Gentlemen  of  the  Committees,  and  Gentlemen: 

k  THANK  you  for  the  privilege  of  appearing  before  you  for 
the  purpose   of  discussing  Workmen's   Compensation,  and 
laws  relating  thereto.     I  trust  that  you  will  bear  with  me 
this  evening  for  the  reason  that,  on  account  of  the  work 
ve  been  doing  for  the  past  six  weeks,  and  the  enormous  stress 
under  which  I  have  been  working,  I  am  well  nigh  worn  out.     The 
work  to  which  I  refer  has  been  that  of  making  an  analytical  and 
critical  study  of  Workmen's  Compensation  and  the  laws  relating 
thereto,  and  particularly  the  Workmen's  Compensation  Law  of  the 
State  of  Washington,  and  of  making  a  thorough  investigation  of 
the   practical    operation   of  the   Washington  Act  as   it  has   been 
administered  since  October  1,  1911,  in  the  State  of  Washington. 
I   have  been  devoting  especial  attention  to  the  Washington  Act 
for  the  reason  that  three  of  the  bills  now  pending  before  your 
Legislature  are  based  upon  the  Washington  idea. 

In  order  that  you  may  understand  my  viewpoint,  I  trust  you 
will  excuse  the  references  that  I  shall  make  to  myself  in  the 
course  of  my  discussion  of  this  subject.:  Jfl-.tjife'^irst  placfejXwas 
born  in  poverty  and  have  been  reared  '"in  me  'School  'of  Hard 
Knocks — am  a  self-made  man.  I  ^a*ke]«.t6is  •a{a^e^*»t:\^ot>.<the 
reason  that  I  want  the  representatives  of  laobr  on  this  'committee 
to  fully  understand  that  I  know  all  of  your  problems  of  life,  know 

416801 


2 

the  motives  that  actuate  you  in  your  daily  affairs,  and  sympathize 
with  you  in  your  efforts  to  better  your  condition  and  elevate  your 
station  in  life. 

At  this  point,  I  shall  relate  you  a  bit  of  my  personal  experi- 
ence by  way  of  illustration  of  the  problems  that  you  now  have 
under  consideration.  As  a  boy,  I  owned  my  own  horse,  and  re- 
sorted to  horse-trading  as  a  means  of  financial  gain;  and  believe 
that  I  acquired  a  fair  quantity  of  what  is  ordinarily  called  "com- 
mon horse  sense."  I  might  say  right  here  that  the  proper  exer- 
cise of  "common  horse  sense"  is  all  that  is  necessary  to  enable 
you  to  arrive  at  a  proper  solution  of  the  question  that  we  now 
have  under  consideration.  Some  of  you  have  doubtless  swapped 
horses  and  will  appreciate  the  statements  that  I  am  about  to 
make.  There  are  three  methods  of  swapping  horses:  First,  swap- 
ping unsight  and  unseen-^second,  swapping  as  they  stand;  third, 
swapping  on  a  try-out,  i.  e.,  swapping  after  you  have  seen  the 
other  fellow's  horse  in  action.  I  have  swapped  horses  hundreds 
of  times,  and  usually  made  money  by  the  transactions;  but  I 
always  relied  upon  the  third  method  mentioned.  I  have  seen  many 
men  swap  horse's  upon  the  first  and  second  propositions  men- 
tioned. In  a  trade  of  that  kind,  I  always  noticed  that  some  one 
got  "stung."  You  can  readily  see  that  this  would  be  the  case. 
Now,  gentlemen,  it  appears  to  me  that  the  proposition  before 
you  relative  to  this  Workmen's  Compensation  matter  is  analogous 
to  the  proposition  in  a  horse  trade,  and  that,  in  a  large  measure, 
all  of  the  propositions  before  you  are  stated  in  a  form  analogous 
to  my  horse  trading  propositions  numbers  one  and  two. 

We  have  been  riding  and  driving  this  old  reliable  Employers' 
Common  Law  Liability  horse  for  a  great  many  years.  It  is  now 
said  that  this  old  family  horse  is  well  now  worn  out.  The  whole 
Montana  family  admits  that  this  is  true.  We  have  concluded  to  make 
a  swap  and  find  ourselves  bantered  for  a  trade  from  several 
different  sources.  My  clients  do  not  swap  horses  in  the  middle  of 
the  s*0te^ln.  Tfcey  :s$ttap*  Worses  only  upon  the  third  proposition 
mentioned*,  to  "w*!*:,  ^tcr'-tfaving  seen  the  other  fellow's  horse  in 
ac]^on;»t^ej*«f.o^B*,"Whei5  this"  pVoposition  of  swapping  the  old  fam- 
ily Horse,"  Emp*foyelV*Cbm*nrit>1n  Law  Liability,  for  this  young  colt 
called  Workmen's  Compensation  had  been  made,  my  clients  en- 


—  3  — 

gaged  my  services  for  the  purpose  of  making  an  investigation, 
i.  e.,  making  some  personal  observations  of  the  other  fellow's 
horse  in  action. 

In  this  matter,  I  represent  the  following  Montana  employers 
and  their  employes.  The  employers  and  the  employes  of  each 
firm  that  I  represent  constitute  a  family  all  of  whom  are  to  be 
seriously  affected  by,  and  are  vitally  interested  in,  the  proposi- 
tion under  discussion.  The  Montana  firms  that  I  represent  are 
as  follows,  to  wit:  State  Lumber  Company,  of  Kalispell,  Mon- 
tana; Olson  &  Johnson  Company,  building  contractors  of  Missoula, 
Montana;  the  Great  Falls  Builders'  Association,  consisting  of 
seventy-five  employers  of  Great  Falls,  Montana;  Rynker-Winter 
Company,  Gagnon  &  Co.,  and  Western  Ornamental  Plaster  Com- 
pany, of  Billings,  Montana.  I  have  stated  that  I  represent  these 
employers  and  their  employes.  I  have  made  this  statement  in  this 
form  because  I  have  not  heard  a  single  speaker  who  has  hereto- 
fore appeared  before  this  committee  make  the  statement  that  he 
represented  any  one  other  than  the  employer  and  his  interest.  I 
have  made  my  statement  in  this  form  for  the  reason  that  my 
clients  are  deeply  interested  in  the  prosperity,  happiness,  content- 
ment and  general  welfare  of  their  employes;  in  fact,  the  general 
welfare  of  the  employes  has  always  been  the  first  consideration 
of  my  clients;  therefore,  when  these  employers  had  retained  my 
services  for  the  purpose  of  making  this  investigation,  I  was  re- 
quested to  investigate  this  proposition  most  carefully  from  the 
standpoint  of  our  employes.  Our  employes  were  satisfied  that  I 
should  perform  this  duty  for  them,  and  they  are  willing  to  accept 
my  judgment  with  respect  to  this  matter  in  the  utmost  good 
faith.  Under  these  circumstances,  my  interest  in  that  great  body 
of  employes  engaged  in  the  services  of  the  above  mentioned  em- 
ployers becomes  paramount  to  every  other  interst  that  I  may  have 
in  this  matter,  and  my  discussion  of  this  question  will  be  mainly 
from  the  standpoint  of  the  general  welfare  of  these  employers. 

There  are  two  of  these  Workmen's  Compensation  colts  offered 
us  in  ex^wnge  for  our  old,  worn-out  Employers'  Common  Law 
Liability  horse.  One  is  named  Washington  Workmen's  Compen- 
sation Idea,  and  the  other,  the  New  Jersey  Workmen's  Compensa- 
tion Idea.  Each  of  three  of  these  bills  before  the  Legislature  of 


4 

Montana  contains  a  proposition  to  exchange  the  Employers'  Com- 
mon Law  Liability  system  of  Montana  for  the  Workmen's  Com- 
pensation Idea  of  Washington,  a  State-administered  Workmen's 
Compensation  insurance  scheme.  One  of  the  bills  before  the  Mon- 
tana Legislature  contains  the  proposition  to  exchange  your  Com- 
mon Law  Employers'  Liability  system  for  the  New  Jersey  Work- 
men's Compensation  Idea,  a  system  wherein  liability  for  Work- 
men's Compensation  is  placed  directly  upon  the  employer.  I  shall 
discuss  these  propositions  in  the  order  in  which  I  have  named 
them. 

What  I  have  seen  and  heard  since  I  have  been  in  attendance 
upon  your  committee  hearings  has  convinced  me  that  you  are  well 
aware  of  the  fact  that  the  propositions  before  you  constitute 
the  most  important  matter  of  legislation  that  you  will  ever  have 
to  decide.  I  believe  that  you  are  fully  convinced  that  this  matter 
is  of  the  utmost  importance,  not  alone  to  yourselves,  but  to  your 
children  and  your  children's  children,  your  neighbor,  your  neigh- 
bor's children  and  your  neighbor's  children's  children,  to  every 
Montana  employer,  his  children  and  his  children's  children,  to 
every  Montana  employe,  his  children  and  his  children's  children, 
and  to  society  at  large  of  the  great  and  prosperous  State  of  Mon- 
tana for  all  time  to  come.  I  am  convinced  that  you  fully  realize 
this  fact  because  I  have  never  seen  a  body  of  men  gathered  to- 
gether for  the  purpose  of  discussing,  considering  and  deciding  any 
matter  who  have  devoted  themselves  more  assiduously  to  the  sub- 
ject matter  of  the  discussion  than  you  have  done. 

After  having  heard  a  number  of  these  discussions,  I  had  thought 
that  there  was  little  left  to  be  said  on  the  subject;  however,  as  I 
have  stated  before,  the  failure  of  the  speakers  who  preceded  me 
to  analyze  this  proposition  fully  from  the  standpoint  of  the  wel- 
fare of  the  employe  makes  it  desirable  that  you  should  have  placed 
before  you  all  of  the  facts  bearing  upon  this  question  from  this 
standpoint  by  one  who  is  in  possession  of  first-hand  information 
as  to  the  practical  operation  of  the  Washington  Workmen's  Com- 
pensation Act.  A  discussion  of  this  question  from  this  angle 
by  one  who  possesses  these  facts  is  rendered  most  desirable  be- 
cause of  the  fact  that  these  three  propositions  to  exchange  your 
Montana  Common  Law  Employers'  Liability  system  for  the  Wash- 


—  5  — 

ington  Workmen's  Compensation  Idea  comes  from  certain  repre- 
sentatives of  organized  labor  of  the  State  of  Montana,  and  it  may 
be  that  those  who  are  making  these  propositions  do  not  fully 
appreciate  the  true  meaning  of  the  same.  I  believe  that  those 
who  have  made  these  propositions  have  done  so  with  the  very  best 
intentions.  I  should  not  impugn  their  purposes  and  intentions, 
but  I  do  believe  that  they  are  honestly  mistaken  in  the  conclusions 
that  they  have  reached.  I  shall  state  the  facts  and  submit  the 
proof  that  leads  me  to  conclude  that  these  men  do  not  fully  under- 
stand the  facts  from  which  they  have  drawn  their  conclusions.  If 
the  proof  that  I  shall  submit  should  convince  you  that  a  mistake 
has  been  made  and  that  a  graver  mistake  is  about  to  be  made, 
the  representatives  of  labor  of  this  State  are  sufficiently  intelli- 
gent, and  have  sufficient  courage  of  conviction  to  withdraw  the 
propositions  that  they  have  made,  and  that  they  will  then  be 
willing  to  meet  the  employers  of  the  State  of  Montana  on  mutual 
ground  and  agree  upon  a  proposition  that  will  work  even-handed 
justice  to  every  employe  and  every  employer  and  society  at  large 
in  this  State. 

In  beginning  my  discussion  of  the  relative  merits  and  de- 
merits of  the  propositions  before  us,  I  for  myself  personally,  for 
my  clients,  and  for  their  employes  shall  admit  that  our  old  Com- 
mon Law  Employers'  Liability  system,  under  which  the  employe 
is  permitted  to  recover  damages  of  his  employer  on  account  of 
personal  injuries  sustained  in  the  course  of  the  employe's  work, 
on  the  ground  that  the  injury  was  sustained  solely  by  reason  of 
the  negligence  of  tKe  employer,  is  no  longer  suited  to  the  indus- 
trial conditions  of  this  State;  and  that  we  need  a  good,  safe,  sane, 
common  sense,  workable  Workmen's  Compensation  law.  The  dis- 
astrous circumstances  that  have  fallen  under  the  observation  of 
each  and  every  one  of  us  make  it  unnecessary  for  me  to  submit 
you  any  proof  of  this  assertion.  You  have  often  seen,  and  I  have 
often  seen,  this  system  work  disaster,  both  to  the  employer  and 
the  employe;  disaster  entailed  upon  the  employer  by  reason  of 
the  recovery  of  enormous  verdicts,  in  rare  cases,  by  injured  em- 
ployes whose  injuries  may  have,  or  may  not  have,*  entitled  them 
to  the  amount  of  the  award  by  the  jury;  disaster  entailed  upon 
the  employe  in  numerous  cases,  by  reason  of  the  granting  of  the 


—  6  — 

defendant's  motion  for  non-suit,  or  by  reason  of  the  direction  of 
a  verdict  by  the  court  in  favor  of  the  defendant  at  the  conclusion 
of  the  plaintiff's  case,  on  the  ground  that  the  jury  for  which  the 
employe  sought  to  recover  damages  was  sustained  by  reason  of 
the  negligence  of  a  fellow  servant,  by  reason  of  the  employe's 
own  negligence,  or  by  reason  of  the  ordinary  risk  inherent  in  the 
work  being  performed  at  the  time  of  the  injury — assumption  of 
risk.  These  'disasters  to  employes,  occasioned  by;  reason  of  the 
foregoing  defenses  of  the  employer  in  such  cases,  have  been  so 
grave  as  to  causs  these  defenses  to  become  known  as  "the  unholy 
trinity."  These  disasters  are  the  cause  of  our  conviction  that 
the  good  of  all  parties  concerned  demands  that  this  system  be 
supplanted  by  a  Workmen's  Compensation  system  which  is  said 
to  be  more  humane  and  more  equitable. 

Now,  let  us  define  Workmen's  Compensation.  What  is  this 
popular  new  principle  known  as  Workmen's  Compensation,  the 
sound  of  which  is  such  sweet  music  in  the  public  ear,  and  the 
advocacy  of  which  has  become  such  a  luscious  morsel  in  the 
mouths  of  idealists,  paternalists,  humanitarians  and  politicians, 
and  the  adoption  of  which  some  parties  would  lead  us 
to  believe  will  mark  the  dawning  of  the  millennium.  Pure 
Workmen's  Compensation  is  accident  insurance  in  the  hazardous 
industries,  provided  by  the  employer  in  such  industries  for  the 
benefit  of  his  employes  engaged  therein  who  may  be  accidentally 
injured  in  the  course  of  their  employment.  This  means  that  each 
employer  shall  pay  a  definite  and  certain  amount  of  compensation 
to  each  of  his  employes,  or  their  dependents  in  the  event  of  em- 
ploye's death,  who  may  be  accidentally  injured  in  the  course  of 
his  employment,  regardless  of  whose  negligence  or  fault  caused 
the  injury.  This  proposition  is  somewhat  surprising,  but  this  is 
not  all  that  this  proposition  means.  It  also  means  that  the 
employer's  defenses,  heretofore  referred  to  as  "the  holy  trinity," 
(1)  that  the  injury  was  caused  by  the  negligence  of  a  fellow  ser- 
vant; (2)  that  the  employe's  own  negligence  caused  the  injury; 
(3)  and  that  the  employe  assumed  the  ordinary  risk  inherent  in 
the  business,  are  to  be  abolished.  This  proposition  is  startling. 
If  adopted,  it  will  be  a  radical  departure  from  the  established 
principles,  theories  and  practices  of  past  centuries  in  this  country; 


\ 


therefore,  wisdom  dictates  that  we  proceed  cautiously  and  pru- 
dently, lest  in  our  effort  to  remedy  existing  evil  conditions,  we 
should  stumble  into  a  pitfall  wherein  our  condition  may  be  many 
times  more  deplorable  than  that  from  which  we  sought  to  escape. 

Our  national  government  and  our  State  governments  have  been 
founded  upon  the  great  American  principle  of  individualism.  The 
American  citizen  has  been  taught,  and  has  believed,  that  every 
man  was  justly  entitled  to  all  of  the  fruits  of  his  honest  toil; 
that  so  long  as  he  labored  honestly  and  did  no  wrong,  he  should 
reap  the  full  harvest  of  his  efforts;  that,  if  he  committed  a 
wrong,  he  and  he  alone,  should  recompense  the  injured  party  for 
the  damage  sustained,  and  as  a  corollary  to  this  principle,  we 
find  another  equally  important  principle  of  our  Americanism,  i.  e., 
that  so  long  as  a  man  did  no  wrong  in  the  conduct  of  his  business, 
he  should  be  entitled  to  conduct  that  business  in  his  own  way. 

The  Murphy,  Cutts  and  O'Shea  bills  contain  principles  and 
propose  the  establishment  of  practices  in  direct  contravention  of 
the  principles  and  practices  just  mentioned.  The  principles  con- 
tained in  these  three  bills,  when  applied  in  actual  practice,  con- 
stitute a  most  effective  first  step  on  the  way  to  completing  State 
control  and  operation  of  industries — a  condition  for  which  no 
Commonwealth  of  this  country  is  prepared. 

It  is  true,  as  we  have  already  admitted,  that  our  present  indus- 
trial condition  makes  it  desirable  for  us  to  accept  and  adopt  a 
new  system  of  handling  industrial  accidents.  Then  good  judg- 
ment dictates  that  we  adopt  that  system  in  such  a  form  that  it 
will  do  least  violence  to  o.ur  American  principles  in  the  process 
of  transition  from  the  old  to  the  new  order  of  things.  No  one  will 
deny  the  fact  that,  if  the  ultimate  result  of  the  application  of  the 
principles  of  and  the  practices  contemplated  by  these  three  bills 
reasonably  tends  to  lead  to  State  control  and  operation  of  indus- 
tries, their  adoption  would  do  the  greatest  violence  to  our  estab- 
lished ideals  of  government;  and  for  this  reason,  should  b« 
shunned,  provided  there  is  any  other  means  of  accomplishing  th« 
desired  result. 

There  is,  in  my  opinion  and  in  the  opinion  of  the  great  major- 
ity of  the  able  men  who  have  studied  this  question,  another  more 
effective  means  whereby  the  objects  sought  to  be  obtained  may 


—  8  — 

be  accomplished  in  the  most  effective  manner,  and  yet  do  little 
violence  to  the  aforesaid  established  American  ideals. 

In  view  of  these  things,  you  must  now  fully  realize  that  the 
matter  under  discussion  is  one  of  such  magnitude  that  its  proper 
solution  should  require  statesmanship  of  no  less  calibre  than  the 
foundation  of  our  government  required;  otherwise,  we  may  all  live 
to  regret  the  day  in  which  we  accepted  this  new  doctrine  and 
attempted  to  formulate  and  establish  a  system  for  its  practice. 
Yes,  we  may  live  to  hear  our  children  curse  our  stupidity,  in  the 
event  that  any  mistake  is  made  in  solving  this  problem. 

Having  admitted  the  desirability  and  the  wisdom  of  a  radical 
change  with  respect  to  this  matter,  we  then  find  these  questions 
only  in  issue,  to  wit: 

1.  The  FORM  of  the  remedial  law  itself — whether  it  should  be 
compulsory   or  elective. 

2.  The    PLAN    of   its   administration — whether   it   should   be 
administered  directly  by  the  employer  himself,  or  by  a  political 
board  or  commission  and  their  subordinates.    The  form  of  the  law 
and  the  plan  of  its  administration  should  be  such  as  to  do  the 
least  violence  to  the  time-honored  principles  of  our  government, 
and  yet  accomplish  the  desired  end.     The  bills  before  your  Legis- 
lature  indicate   that   there   are   at   least   two   radically   different 
forms  and  plans  of  such  radical  legislation,  i.  e.,  the  form  and 
plan  of  the  Minor  Bill,  which  is  based  upon  the  New  Jersey  idea, 
and  the  form  and  plan  of  the  three  bills  that  I  am  discussing, 
and  that  are  based  on  the  Washington  idea  and  are  designed  to 
establish   State  insurance  of  Workmen.'s   Compensation. 

As  I  have  already  stated,  I  shall  discuss  the  desirability  of  the 
adoption  of  the  form  and  plan  of  the  Minor  Bill,  after  having 
analyzed  and  criticised  the  form  and  plan  of  the  three  bills  de- 
signed to  establish  State-administered  insurance  of  Workmen's 
Compensation. 

It  is  your  sworn  duty  to  select  that  form  and  plan  of  a  law 
which  the  facts  fairly  prove  will  do  the  greatest  good  to  the 
greatest  number  of  the  citizens  of  the  State  of  Montana.  I  believe 
that  you  have  the  honesty  of  purpose  and  the  courage  of  convic- 
tion to  do  your  sworn  duty.  In  my  opinion,  the  best  interest  of 
the  employer,  the  employe  and  society  at  large  may  be 


—  9  — 

served  by  your  selection  of  that  form  and  plan  which  may  be 
most  easily,  most  readily  and  most  generally  acceptable  to  those 
most  vitally  interested  in  this  matter — the  employer  and  the  em- 
ploye. That  form  and  plan  is  most  certainly  the  form  and  plan,  as 
I  have  stated,  that  does  the  least  violence  to  our  established  ideals 
of  government  and  yet  accomplishes  the  desired  ends.  Remember 
that  you  may  successfully  lead,  but  you  canont  successfully  drive, 
the  average  independent  American  citizen.  You  know  that,  and  I 
know,  that;  therefore,  you  should  beware  of  such  an  open,  appar- 
ent and  notorious  pitfall  in  your  honest  effort  to  elevate  your 
own  condition  in  life.  Let  your  good  judgment  be  guided  by  ex- 
perience. Let  your  conclusion  be  based  upon  the  facts  with  respect 
to  this  matter,  disclosed  by  experience  up  to  date. 

Now,  let  us  see  what  those  material  facts  are.  Those  facts 
must  have  been  obtained  from  the  experience  in  the  practical 
operation  of  the  Washington  Workmen's  Compensation  Act  since 
October  1,  1911.  I  have  spent  much  time  and  energy  in  gathering 
these  facts  for  your  benefit,  in  order  that  you  might  be  enabled  to 
draw  an  intelligent  conclusion  in  the  selection  of  the  form  and 
plan  of  the  bill  that  you  will  recommend. 

In  the  first  place,  I  find  that  the  Washington  Act  is  compul- 
sory, rather  than  elective  in  form.  The  Washington  Act  has  been 
defined  as  compulsory,  mutual,  monopolistic,  State-administered 
insurance  of  Workmen's  Compensation.  Insurance  is  guaranteed 
protection  against  loss,  upon  certain  conditions  and  within  definite 
limitations.  The  Washington  Act  guarantees  nothing.  It  neither 
insures  anybody  or  anything;  therefore,  it  is  not  insurance.  The 
Washington  Act  is  a  sterile  attempt  to  establish  hybrid,  State- 
administered  life  insurance  and  Workmen's  Compensation  scheme. 

In  the  second  place,  I  find  that  the  Washington  Act  appropri- 
ates A's  property  to  pay  B's  losses  under  the  Act,  without  due 
process  of  law.  This  may  be  a  sound  principle,  but  it  is  not  ac- 
ceptable to  the  average  independent  American  citizen.  It  may  be 
that,  in  the  exercise  of  its  police  power,  the  State  may  appropriate 
my  property  to  pay  your  losses  under  certain  conditions,  but  I  do 
not  believe  that  the  conditions  under  this  discussion  are  so  inter- 
woven with  the  public  welfare  that  this  principle  should  be  applied 
in  this  case. 


—  10  — 

In  the  third  place,  I  find  that  the  Washington  Act,  by  compul- 
sion, deprives  every  interested  party  of  his  right  to  a  trial  of 
his  cause  by  a  jury  of  his  peers.  This  proposition  is  monstrous! 
The  Constitution  of  the  United  States,  and  of  every  State  in  this 
Union,  guarantees  that  this  right  shall  ever  remain  inviolate. 

In  the  fourth  place,  I  find  by  reading  the  schedule  of  compen- 
sation provided  by  the  Washington  Act,  that  the  amount  of  the 
various  awards  bear  no  relation  to  the  loss  of  earning  capacity 
of  the  injured  party.  A  skilled  mechanic  who  has  earned  $200 
per  month,  is  entitled  to  no  greater  compensation  than  the  section 
hand  who  has  earned  only  $40  per  month.  In  event  of  the  death 
of  these  two  employes,  each  of  their  widows  would  become  en- 
titled to  receive  the  same  amount  of  compensation — $20  per 
month.  This  is  only  one  fair  example  of  the  extremely  inequit- 
able and  inhumane  provisions  of  this  Act  as  to  compensation  pro- 
vided in  the  schedule  of  benefits  under  this  law.  Your  three  bills 
that  I  am  discussing  contemplate  the  adoption  of  this  schedule  of 
compensation.  You  must  not  delude  yourselves  by  believing  that 
such  an  inequitable  and  inhumane  schedule  of  benefits  will  be 
satisfactory  to  injured  employes  and  their  dependents  for  any  very 
considerable  length  of  time. 

It  is  a  further  fact  that  the  whole  of  this  schedule  of  benefits 
has  proven  to  be  wholly  unsatisfactory  to  the  employes  of  the 
State  of  Washington.  As  proof  of  this  assertion,  I  have  but 
to  refer  you  to  the  First  Annual  Report  of  the  Industrial  Insur- 
ance Department  of  the  State  of  Washington,  page  297,  et  seq., 
where  you  will  find  numerous  recommendations  as  to  amendments 
made  by  the  Industrial  Insurance  Commissioners  of  that  State. 
I  have  been  informed,  and  believe  the  fact  to  be  that  these  recom- 
mendations for  amendments  are  the  result  of  the  pressure  that 
has  been  brought  to  bear  upon  this  commission  by  organized 
labor  throughout  the  State  of  Washington. 

In  the  fifth  place,  I  find  that,  for  the  various  reasons  stated, 
grave  and  serious  doubt  exists  as  to  the  constitutionality  of  the 
Washington  Act,  which  doubt  entails  an  enormous  burden  and  in- 
justice upon  the  employer.  Not  only  is  the  careful  employer's 
property  appropriated  to  pay  the  losses  sustained  on  the  works 
and  in  the  plants  of  the  negligent  and  careless  employers,  but  in 


—  11  — 

addition  to  the  amount  appropriated  from  such  careful  employer, 
the  serious  doubt  as  to  the  constitutionality  of  the  Act  itself,  and 
the  extreme  uncertainty  of  the  permanency  of  the  law  compels 
every  prudent  employer  to  expend  an  additional  amount,  nearly 
equal  to  the  amount  appropriated  from  him  by  the  State,  in  the 
purchase  of  an  employers'  liability  policy  of  a  casualty  company. 

The  law  itself  is  so  framed  that  in  event  of  its  repeal  at  any 
subsequent  session  of  the  Legislature  of  the  State  of  Washington, 
or  in  event  of  its  being  declared  unconstitutional  by  any  court, 
a  stupendous  amount  of  litigation  over  personal  injury  damages 
on  account  of  injuries  sustained  during  the  period  of  the  operation 
of  the  law  will  follow  immediately.  In  numerous  instances  the 
volume  of  this  litigation  will  be  such  that  employers  may  be  com- 
pelled to  resort  to  bankruptcy  courts  in  order  to  discharge  their 
liabilities  on  this  account,  unless  they  have  exercised  the  good 
judgment  and  foresight  of  providing  themselves  with  such  protec- 
tion against  such  liability. 

The  injustice  of  this  situation  is  most  clearly  demonstrated 
in  the  case  of  competing  contractors  who  put  in  bids  on  large  con- 
tracts for  construction  work  within  the  State  of  Washington.  The 
prudent  man  feels  the  necessity  of  adding  the  cost  of  such  an 
employer's  liability  policy  to  the  amount  of  his  bid;  and  in  addi- 
tion to  the  amount  that  he  has  figured  that  the  State  of  Wash- 
ington will  compel  him  to  contribute  to  the  Accident  Fund  in  his 
class.  His  competitor  may  not  be  financially  responsible,  or  may 
not  be  a  prudent  business  man,  and  may,  therefore,  eliminate  this 
item  of  cost,  and  thereby  secure  the  contract  which  should  have 
been  awarded  to  the  careful,  prudent  and  financially  responsible 
contractor.  This  is  only  one  fair  example  selected  from  a  list  of 
hundreds  of  such  cases  of  inequity  and  injustice  that  a  jackpot 
State  insurance  scheme  operates  to  produce. 

From  these  findings  of  fact  with  respect  to  the  form  of  the 
Washington  Act,  I  have  been  forced  to  draw  the  following  con- 
clusions, to  wit: 

1.  I  am  of  the  opinion  that  it  is  extremely  doubtful  whether 
the  Supreme  Court  of  the  United  States  will  hold  this  law,  or 
any  modified  form  thereof,  to  be  constitutional.  In  this  opinion,  I 
agree  with  a  great  majority  of  the  ablest  lawyers  of  this  country, 


—  12  — 

Judge  Laffey,  who  is  Chief  Counsel  for  the  Du  Pont  Powder 
Company,  is  one  of  these  lawyers  with  whom  I  agree.  At  this 
t?me,  Judge  Laffey  and  his  associates  are  defending  an  action 
brought  by  the  State  of  Washington  against  the  Du  Pont  Powder 
Company  for  the  collection  of  approximately  $9,000  on  account  of 
levied  assessments,  penalties  and  contributions  to  the  Powder 
Mill  Class  of  the  Industrial  Accident  Fund,  made  necessary  by 
reason  of  losses  arising  out  of  a  disaster  that  occurred  in  another 
company's  plant. 

These  contributions  have  been  demanded  of  the  Du  Pont  Powder 
Company,  notwithstanding  the  fact  that  this  disaster  occurred  by 
reason  of  no  negligence  -or  fault  on  the  part  of  the  Du  Pont 
Powder  Company,  and  notwithstanding  the  fact  that  the  injured 
employes  and  the  dependents  of  those  who  lost  their  lives  in  this 
disaster  have  not  received  the  compensation  provided  by  law.  You 
will  remember  that  I  have  already  stated  that  the  Washington 
Act  does  not  insure  anything  or  anybody.  The  Du  Pont  Powder 
Company  is  also  defending  an  action  brought  against  it  on  ac- 
count of  personal  injury  damages  sustained  by  one  of  its  em- 
ployes who  was  injured  in  the  course  of  his  employement  that 
came  within  the  scope  of  the  compensation  law. 

I  am  associated  with  the  attorneys  for  the  defendant  in  the 
case  of  F.  E.  Hinkley  vs.  the  Phoenix  Lumber  Company.  This  is 
an  action  brought  directly  in  the  Federal  Court  by  an  injured 
employe  who  sustained  injuries  in  the  course  of  his  employment 
that  came  within  the  scope  of  the  Washington  Act.  Hinkley 
refused  to  accept  compensation  from  the  State  and  brought  this 
action  on  the  ground  that,  for  the  reason  that  I  have  stated,  the 
Washington  Act  is  unconstitutional.  There  are  a  great  many 
other  cases  of  the  same  kind  now  pending  in  the  various  courts 
of  the  State  of  Washington.  Employers  are  being  sued  by  their 
employes;  employers  are  being  sued  by  the  State;  and  employes 
are  suing  the  State.  While  the  facts  stated  make  a  serious  situ- 
ation, yet,  in  my  opinion,  the  trouble  has  only  barely  begun.  This 
is  a  deplorable  condition. 

In  view  of  the  above  stated  facts  and  conditions,  I  do  not 
believe  that  you  will  seriously  contend  that  the  form  of  the  Wash- 
ington Act,  or  any  modified  form  thereof,  would  not  do  great 


—  13  — 

violence  to  the  time-honored  principles,  theories  and  practices  of 
our  government.  I  do  not  believe  that  you  will  contend  that  a 
proposition  to  establish  such  a  deplorable  state  of  affairs  in  the 
State  of  Montana  should  be  easily,  readily  and  generally  accept- 
able to  employers,  employes  and  'society  at  large  of  this  State. 

2.  Lest  we  may  have  overlooked  some  of  the  material  facts 
in  this  case,  it  may  be  edifying  to  refer  back  to  the  Report  of  the 
Commission  appointed  by  Hon.  M.  E.  Hay,  ex-Governor  of  the 
State  of  Washington,  for  the  purpose  of  investigating  this  prob- 
lem, and  see  what  illuminating  facts  that  report  discloses.  I  sub- 
mit the  report  itself,  and  you  will  observe  that  it  consists  of 
only  five  pages  in  this  small  pamphlet.  That  a  law  of  this  kind 
should  have  been  enacted,  when  based  upon  such  a  meager  and 
inadequate  report,  that  shows  upon  its  face  utter  lack  of  industry 
and  intelligence  in  its  preparation,  is  an  enormous  crime — when 
we  consider  its  manifold  ramifications  and  its  far-reaching  effects 
upon  employes,  employers  and  society  at  large. 

This  report  is  absolutely  devoid  of  any  adequate  statement  of 
the  material  facts  upon  which  this  law  is  based.  But  this  report 
is  pregnant  with  numerous  misstatements  of  alleged  facts  that 
have  been  shown  to  be  false  by  experience  under  the  practical 
operation  of  the  law.  I  will  refer  to  two  instances  only,  for  the 
reason  that  these  two  propositions  constitute  the  justification  for 
the  apporpriation  from  the  General  Fund  of  the  State  of  Washing- 
on  the  sum  of  $150,000  to  pay  the  expenses  of  the  administration 
of  this  Act,  which  appropriation  has  proven  to  be  grossly  inade- 
quate. This  commission  justified  this  proposition  upon  the  follow- 
ing alleged  facts,  to  wit: 

1.  That  the  practical  operation  of  this  Act  would   reduce  ex- 
penses  to    the    State    and    the    several    counties    of   the    State    by 
eliminating    litigation    over   personal    injury    damages,   to   the   ex- 
tent of  at   least  $100,000. 

2.  That  the  practical   operation  of  this  Act  would  relieve  the 
various  counties  of  the  State  from  an  enormous  financial  burden, 
entailed   by   reason   of  caring  for  Injured  workmen,  their  widows 
and   children   who   became  public   charges   on    account   of   injuries 
sustained  by  these  workmen  in  the  course  of  their  employment. 

The  fact  is  that  this  Act  does  not  operate,  and  may  not  be 
expected  to  operate  to  reduce  the  above  mentioned  court  expenses. 


—  14  — 

The  fact  is  that  employes  injured  in  the  course  of  their  employ- 
ment within  the  scope  of  this  law,  have  been  cast  upon  the  various 
counties  of  the  State  of  Washington  in  much  greater  numbers 
during  the  operation  of  this  law  .than  before  its  adoption. 

These  things  being  true,  there  is  no  reasonable  justification  for 
the  appropriation  of  one  single  dollar  of  the  taxpayers'  money  for 
the  purpose  of  administering  this  Act.  The  consumer  and  tax- 
payer, by  reason  of  the  practical  operation  of  this  Act,  pays  an 
increased  price  for  the  manufactured  product  that  he  buys,  or 
for  the  services  that  are  rendered  him,  and  also  pays  the  expenses 
of  the  administration  of  the  Act  itself,  by  taxation  upon  his 
property.  There  is  neither  equity  nor^  justice  in  such  a  proposition, 
nor  may  we  reasonably  expect  the  citizens,  consumers  and  tax- 
payers of  any  State  to  be  content  to  permit  the  continuance  of 
such  a  scheme  for  any  very  considerable  length  of  time.  In  fact, 
this  element  has  already  manifested  itself. 

3.  This  class  of  legislation  should  be  permanent.  Your  bill 
should  be  so  drawn  that  the  practical  operation  thereof  will  ac- 
complish great  good.  Let  me  repeat.  Your  bill  should  be  drawn 
in  such  terms  that  it  will  be  most  easily,  most  readily  and  most 
generally  acceptable  to  the  employer,  the  employe  and  the  citizen- 
ship of  your -State;  for,  if  it  is  not  so  drawn,  then  it  must  fall, 
either  by  reason  of  being  declared  unconstitutional  by  the  Supreme 
Court  of  your  State,  or  of  the  United  States,  or  by  reason  of  its 
repeal  by  some  subsequent  session  of  your  Legislature.  And  the 
fall  of  a  law  of  this  kind,  by  reason  of  the  happening  of  either 
cf  the  events  that  I  have  mentioned,  would  be  a  State-wide  calam- 
ity. Now,  you  must  agree  with  me  that  the  above  stated  facts, 
and  the  conclusions  drawn  therefrom,  are  sufficient  to  force  any 
reasonable,  prudent  man  to  concede  this  point,  that  your  law 
should  be  elective,  rather  than  compulsory  in  form — elective  both 
as  to  employer  and  employe,  if  the  desired  purposes  and  objects 
of  this  class  of  remedial  legislation  is  to  become  an  accomplished 
fact. 

The  plan  of  administration  of  the  Washington  Act,  and  the 
plan  of  administration  presented  in  the  three  bills  that  you  have 
under  consideration  and  that  I  am  discussing,  presents  some  facts 
that  seem  even  more  monstrous  than  the  facts  relating  to  the 


—  15  — 

form  of  the  Washington  Act.  Let  us  see  what  these  facts  are: 
1.  I  find  that  the  Industrial  Insurance  Commission,  charged 
with  the  administration  of  the  Washington  Act,  consists  of  a  po- 
litical commission  of  three  members;  that  the  subordinates,  num- 
bering more  than  one  hundred  persons,  are  political  appointees; 
that  the  members  of  this  commission,  as  well  as  their  subordinates, 
obtained  their  respective  positions  as  a  reward  for  political  service 
rendered,  or  to  be  rendered,  without  regard  to  competency  and 
experience  in  the  particular  work  to  be  performed.  The  number 
of  these  subordinates  may  seem  large;  however,  the  fact  is  that 
the  present  number  should  be  multiplied  by  ten,  if  the  Act  is  to 
be  administered  in  an  efficient,  economical  and  satisfactory 
manner. 

You  are  an  intelligent  body  of  men;  therefore,  I  do  not  need 
to  call  your  attention  to  the  danger  to  society  at  large  of  such  a 
political  organization  administering  such  a  big  business  that  is  so 
full  of  political  opportunities.  The  least  misuse  of  the  power 
conferred  upon  this  commission  and  its  subordinates,  under  this 
Act,  might  easily  wreck  any  Commonwealth  of  this  country.  In 
this  connection,  I  want  to  add  that  neither  the  Washington  Act 
nor  the  bills  that  I  am  discussing  provide  any  adequate  rules  of 
limitation  upon  the  conduct  of  such  a  political  organization. 

2.  The  history  of  the  Washington  Act  shows  that  it  was  fath- 
ered by  a  ring  of  politicians,  for  the  purpose  of  catching  the  votes 
of  the  Labor  Party  of  the  State  of  Washington.  It  was  born  of 
a  political  scheme,  rather  than  humane  intentions  and  purposes. 
I  have  yet  to  see  any  good  thing  emanate  from  such  a  source. 
This  attempt  to  build  a  political  machine  upon  this  business  propo- 
sition has  been  the  downfall  of  one  political  party,  and  will  result 
in  the  disruption  and  destruction  of  any  political  party  that  may 
attempt  such  an  abortion. 

Hundreds  of  the  citizens  of  the  State  of  Washington  frankly 
tell  men  that  this  Act  has  been  administered  largely  along  politi- 
cal lines,  even  during  the  short  time  that  it  has  been  in  force. 
This  charge  is  very  significant,  and  should  constitute  a  grave 
warning  to  you.  Under  such  conditions  as  I  have  already  detailed 
to  you,  neither  employer,  employe  nor  society  at  large  may  reason- 
ably expect  fair,  equitable  and  honest  treatment. 


—  16  — 

3.  Let  us  further  examine  the  political  phases  of  this  proposi- 
tion, particularly  from  the  standpoint  of  the  employer.  I  have 
been  informed  that  before  the  passage  of  the  Washington  Act,  a 
delegation  of  business  men  went  to'Olympia,  Washington,  and 
interviewed  the  politicians  who  were  then  advocating  the  passage 
of  the  bill  relative  to  the  cost  of  the  compensation  provided  in  the 
schedules  of  this  law.  I  understand  that  these  politicians  told 
this  delegation  of  business  men  that  the  cost  in  Class  10  (lumber- 
ing, milling,  etc.),  according  to  the  statistics  at  hand,  should  not 
exceed  the  sum  of  $1.50  per  $100  of  the  payroll  in  this  class,  which 
cost  was  the  same  as  the  casualty  companies  were  then  charging 
in  this  class  for  employers'  liability  policies.  This  satisfied  these 
employers. 

These  politicains  either  did  not  know  what  the  cost  would  be, 
or  they  misrepresented  the  fact  to  these  employers.  When  seven 
monthly  calls  of  assessments  had  been  made  on  employers  in 
Class  10  (lumbering,  milling,  etc.),  the  flat  cost  amounted  to  the 
sum  of  $1.46  per  $100  of  the  payroll  in  this  class.  That  was  in 
May,  1912,  several  months  prior  to  election  time.  The  administra- 
tion forces  were  vitally  interested  in  the  result  of  that  election. 
Accidents  were  being  reported  in  large  numbers  in  this  class.  The 
administration  forces  could  clearly  see  that  the  cost  in  this  class 
must  necessarily  greatly  exceed  the  amount  that  these  politicians 
had  said  that  it  should  be.  Something  had  to  be  done  to  save 
the  day.  Should  the  fact  become  generally  known  that  the  cost  in 
this  class  would  be  $2.50  per  $100  of  the  payroll,  and  still  leave  a 
deficit  in  that  fund,  the  political  party  then  in  power  was  doomed; 
therefore,  further  calls  in  this  class  were  passed;  settlments  were 
deferred  as  far  as  possible.  Necessary  reserves  were  not  made  to 
mature  accruing  liabilities.  The  Industrial  Insurance  Commission 
books  were  closed  on  September  30,  1912,  and  the  commission's 
report  shows  that  at  that  time  the  fund  in  Class  10  contained 
only  $590,  and  the  flat  cost  had  amounted  to  $1.46  per  $100  of  the 
payroll  in  that  class,  notwithstanding  the  fact  as  to  the  methods 
employed  to  make  a  "good  showing." 

Necessarily,  the  condition  in  this  class  was  such  that,  imme- 
diately after  election,  it  was  imperative  that  the  commission  make 
several  calls  of  assessments  in  this  class,  in  quick  succession,  for 


—  17  — 

• 

the  purpose  of  retiring  liabilities  that  accrued  and  should  have 
properly  been  returned  under  the  business  for  the  year  ending 
September  30,  1912.  This  fact  was  a  rude  surprise  to  every  em- 
ployer within  that  class,  as  well  as  to  many  other  employers  who 
were  not  interested  in  that  class.  The  political  party  in  power 
during  the  first  year  of  the  administration  of  this  Act  was  also 
charged  with  the  investment  of  the  reserves  segregated  from 
the  Accident  Fund. 

It  is  a  strange  coinicidence  that  the  sum  of  $80,500 — one-third 
of  the  total  reserves  made  and  invested  from  this  Accident  Fund 
— went  into  bonds  of  the  cities  and  school  districts  of  the  Yakima 
Valley,  the  scene  of  the  hottest  political  battle  in  the  State. 

One  of  the  leading  business  men  of  the  State  of  Washington, 
who  is  the  manager  of  the  biggest  business  in  that  State,  has 
estimated  that  on  September  30,  1912,  there  was  in  fact  an  enor- 
mous deficit,  amounting  to  approximately  $300,000,  in  the  fund  of 
Class  10.  We  should  not  lay  these  faults  at  the  doors  of  the  men 
charged  with  the  administration  of  this  law.  The  fault  lies  with 
the  plan  of  administration  of  the  law  that  makes  this  "probable" 
condition  at  all  "possible." 

4.  Notwithstanding  the  political  activities  of  the  party  then 
in  power,  represented  by  ex-Governor  Hay,  that  party  met  its 
Waterloo  at  the  last  general  election  in  the  State  of  Washington, 
held  in  November,  1912.  That  administration  has  been  succeeded 
by  a  Democratic  administration.  "To  the  victors  belong  the  spoils." 
Mr.  Hugh  C.  Todd,  who  is  the  Democratic  State  chairman,  and 
ether  Democrats  in  influential  positions,  have  issued  an  ultimatum 
wherein  it  is  stated  that  a  clean  sweep  of  all  administration  offi- 
cers and  their  subordinates  is  to  be  the  rule.  All  of  those  who 
have  any  knowledge  of  the  Washington  Workmen's  Compensation 
Act,  or  who  have  any  experience  in  its  administration,  will  be  let 
out  automatically.  Their  positions  will  be  filled,  no  doubt,  by 
inexperienced  officials  and  subordinates. 

Should  your  competitor  and  neighbor  establish  his  business 
Mpon  the  above  stated  basis,  what  would  you  think  of  his  business 
sagacity  and  judgment?  Would  you  therefore  conclude  that  the 
best  thing  for  you  to  do  would  be  to  adopt  his  system  because 
both  of  you  were  engaged  in  the  same  class  of  business,  in  the 


—18  — 

same  locality,  and  were  subject  to  the  same  trade  conditions  ? 
Would  you  do  so  on  any  consideration  whatsoever?  I  believe 
not,  for  the  reason  that  no  prudent  man  would  expect  efficient, 
economical  and  satisfactory  service  under  such  a  system. 

5.  Let  us  see  who  contributed  to  the  defeat  of  the  political 
party  that  fathered  the  Washington  Workmen's  Compensation 
Act,  and  under  whose  administration  it  was  put  into  operation.  In 
a  lengthy  article  published  in  the  Seattle  "Post-Intelligencer"  on 
January  14,  1913,  ex-Governor  Hay  admitted,  over  his  own  signa- 
ture, that  he  was  advised  of  one  instance  in  which  fifteen  big 
employers  of  the  State  gave  $500  each  for  the  purpose  of  defeat- 
ing him  on  account  of  the  egregious  blunder  that  he  had  made  in 
connection  with  the  Washington  Workmen's  Compensation  Act. 
If  these  fifteen  employers  mentioned  by  ex-Governor  Hay  are 
known  to  have  taken  such  an  interest  in  this  matter,  what  were 
the  other  dissatisfied  employers  doing?  And  those  other  dissatis- 
fied employers  constitute  quite  an  army.  There  is  a  difference 
between  "telling  the  truth"  and  "telling  the  WHOLE  truth."  Why 
did  not  Mr.  Hay  make  a  full  confession  and  tell  us  about  the  united 
opposition  of  several  of  the  large  labor  organizations  in  the  State 
of  Washington,  and  state  the  amounts  expended  by  them  in  his 
Jefeat?  Should  he  have  done  so,  he  would  have  stated  the  propo- 
sition fairly,  so  that  the  whole  world  might  have  known  what  the 
true  attitude  of  both  employers  and  employes  in  the  State  of 
Washington  is  with  respect  to  the  form  of  the  Washington  Act 
and  the  plan  of  its  administration. 

You  will  remember  that  in  the  beginning  I  stated  that  my 
treatment  of  this  subject  would  be  largely  from  the  standpoint 
of  the  employer.  The  Washington  Act  works  great  injustice  to 
the  employe,  one  element  of  which  injustice  I  have  already  illus- 
trated. The  compensation  awards  are  improperly  and  indequately 
arranged,  i.  e.,  the  law  promises  sure  and  speedy  relief,  but  in- 
jured persons  have  to  wait  sixty  to  ninety  days,  and  longer,  for 
any  relief  at  all. 

At  the  time  of  the  injury,  when  relief  is  imperative,  the  claim- 
ant receives  only  long  technical  reports  to  be  filled  out  and  for- 
warded to  the  commission.  The  commission  handles  the  investi- 
gation and  awards  by  correspondence.  The  employer,  employe 


—  19  — 

and  surgeon  must  do  the  work  while  the  commission  boasts  of  its 
small  percentage  of  expense  for  the  administration  of  the  law. 
The  following  is  the  prescribed  routine  before  claims  are  honored 
for  settlement: 

1.  Workmen's  Claim  for  Compensation    (Form  22). 
.     2.   Employers'   Report  of  Accident    (Form   21). 
]     3.   Report  of  Attending    Physician    (Form  23). 

4.   Report  of  Witnesses,   if  any   (Form  28). 

1.  Scrutiny  of  Claims  by   (a)  Claim  Agent, 
and    (b)    Chief    Medical   Advisor. 

2.  Procuring   of   Form   27  or   Form   36. 

3.  Summary  and   Estimate  of  Claim. 

4.  Submission   to   Commission. 

1.  Adjudication   by  Commission. 
,     2.   Issuing  of  Voucher  by  Claim  Agent. 

3.  Checking   on   Minutes. 

4.  Return  of  Voucher  and   Issuance  of  Cash  Warrant. 

The  prosecution  of  a  claim  by  an  injured  employe,  or  his  de- 
pendents, under  this  system,  is  almost  as  tedious  a  matter  as 
the  prosecution  of  a  soldier's  pension  claim  before  the  United 
States  Pension  Office.  The  prosecution  of  a  claim  before  such  an 
Industrial  Accident  Commission  would  be  like  taking  a  course  in  a 
correspondence  school. 

Fearing  that  some  of  you  may  still  be  in  doubt  as  to  whether 
or  not  the  Washington  Act  is  in  fact  wholly  unsatisfactory  to 
every  intelligent  employe,  I  desire  to  read  a  statement  printed  in 
the  "Evening  Telegram,"  published  in  Portland,  Oregon,  on  Janu- 
ary 14,  1913,  which  statement  is  signed  by  thirty-one  business 
agents  and  delegates  to  the  Building  Trades  Council  of  Portland, 
Oregon,  which  business  agents  and  delegates  represented  thirty- 
one  of  the  largest  labor  unions  in  the  State  of  Oregon  in  an  indig- 
nation meeting  caled  for  the  purpose  of  protesting  against  the 
passage  of  a  Workmen's  Compenstaion  bill  based  upon  the  Wash- 
ington Act,  said  bill  being  a  duplicate  of  one  of  the  three  bills 
before  the  Montana  Legislature,  which  bills  we  now  have  under 
discussion. 

By  way  of  explanation,  I  will  say  that  the  State  of  Washing- 
ton is  separated  from  the  State  of  Oregon  for  a  distance  of  more 
than  three  hundred  miles  by  the  Columbia  River  only.  Employes 


—  20  — 

in  the  State  of  Oregon  frequently  go  up  into  the  State  of  Wash- 
ington and  work  in  the  industries  that  come  within  the  scope  of 
the  Washington  Act.  These  employes  have  friends  and  relatives 
who  reside  in  all  parts  of  the  State  of  Washington,  and  who  earn 
their  daily  bread  selling  their  labor  to  employers  whose  busi- 
nesses come  within  the  scope  of  the  Washington  Act.  No  one 
will  deny  the  fact  that  the  business  agents  and  delegates  who 
signed  the  statement  that  I  am  about  to  read  to  you  know  very 
nearly  all  about  the  practical  operation  of  the  Washington  Act 
from  the  standpoint  of  the  employe.  These  business  agents  and 
delegates  say: 

The  employers,  now,  in  the  construction  of  large  buildings  in 
Oregon,  plank  the  floors  as  they  go  up,  and  if  a  man  working 
on  the  tenth  or  fifteenth  floor  falls,  he  only  has  a  few  feet  to 
drop.  Did  they  do  that  before  the  present  Employers'  Liability 
Law?  They  did  not.  Do  they  do  so  in  Washington,  where  they 
have  this  Act?  They  do  not.  On  the  Smith  building,  now  being 
constructed  in  Seattle,  the  same  being  over  twenty  stories  high, 
nothing  above  but  blue  sky  and  nothing  below — twenty-thirty- 
forty  stories — except  death  on  the  hard  ground,  hundreds  of  feet 
below,  with  only  a  narrow  girder  to  walk  or  work  on,  and  a 
large  crane  swinging  heavy  steel  girders  over  your  head,  which 
the  workman  must  catch  and  help  put  in  place.  This  is  all  the 
protection  to  life  and  limb  that  the  Washington  Workmen's 
Compensation  Law  gives  the  poor  iron  workers.  We  do  not 
want  this  kind  of  compensation.  We  want  protection  for  our- 
selves, and  we  will  keep  our  families. 

Hundreds  of  other  instances  of  this  same  character  may  be 
cited  in  the  hazardous  trades  in  the  State  of  Washington. 

In  Oregon  as  soon  as  a  man  is  hurt,  he  is  at  once  rushed  to 
the  hospital  and  the  best  medical  aid  that  can  be  obtained  is  fur- 
nished. This  the  corporation  pays  for,  regardless  of  whether  or 
not  the  man  sues,  as  it  is  better  to  give  the  man  humane  and  just 
treatment,  with  a  better  chance  of  a  settlement  of  claim  out  of 
court. 

From  May  20,  1911,  to  September  30,  1912,  there  were  5,179 
accidents,  with  164  deaths  reported  in  Oregon.  This  is  a  record 
for  fifteen  months  under  our  present  law,  as  against  the  Com- 
pensation Law  in  Washington,  with  13,000  accidents  in  twelve 
months,  almost  two-thirds  more  accidents  in  Washington  under 
Compensation  than  in  Oregon  under  present  law,  or  a  total  of 
7,821  more  accidents  In  Washington  in  one  year  than  in  Oregon 
In  fifteen  months. 

If  there  are  any  humanitarian  principles  in  the  proposed  Com- 
pensation Act,  we  have  failed,  up  to  this  time,  to  find  one  lone 
clause  In  said  Compensation  Act  which  looks  humane  to  us.  We 
do  not  want  cripples  and  parts  of  men  to  the  difference  of  over 


—  21  — 

7,821  per  year,  at  any  rate  of  compensation.  Under  the  Washing- 
ton Act,  employers  do  not  safeguard  their  employes,  and  therefore, 
accidents  are  not  lessened,  but  on  the  contrary,  are  increased 
three-fold,  because  the  employer  can  accomplish  a  considerable 
•more  work  and  at  a  much  less  cost,  by  eliminating  these  pre- 
cautionary measures,  and  he  only  pays  a  certain  amount  to  the 
Fund.  If  he  kills  or  maims  a  few  more  workmen,  why  there  will 
be  plenty  of  others  to  take  their  place,  and  the  work  goes  on  much 
faster.  What  does  such  a  Compensation  Act  mean  to  us?  It 
means  to  us  who  work  under  these  conditions,  loss  of  life,  it 
means  broken  backs,  amputated  arms  and  legs,  and  other  in- 
juries too  numerous  to  mention;  and  what  about  our  wives  and 
families? 

I  contend  that  this  proof  is  clear,  strong  and  convincing.  I 
contend  that  I  need  not  submit  any  further  proof  to  you,  as  rea- 
sonable men,  that  the  Washington  Workmen's  Compensation  Act, 
or  any  modified  form  thereof,  will  be  wholly  unsatisfactory  to 
both  employers  and  employes.  You  should  not  delude  yourselves 
by  believing  that  the  plan  of  your  three  bills  that  I  am  discussing 
— all  of  which  are  based  upon  the  Washington  Act — may  operate 
any  more  satisfactorily  than  does  the  Washington  Act  itself; 
therefore,  these  three  bills  are  wholly  undesirable  and  deserve 
the  condemnation  of  each  and  every  member  of  these  committees. 

In  view  of  the  facts  that  I  have  stated  in  connection  with  the 
three  propositions  of  exchanging  the  Employers'  Common  Law 
Liability  system  of  Montana  for  the  Workmen's  Compensation 
idea  of  Washington,  I  am  convinced  that  your  are  willing  to  con- 
clude with  me  that  such  an  exchange  is  wholly  undesirable.  But 
what  about  the  proposition  of  exchanging  our  worn-out  Employ- 
ers' Liability  system  for  the  New  Jersey  Workmen's  Compensation 
idea? 

Is  it  even  desirable  that  we  should  accept  that  proposition  at 
this  time?  That  proposition  is  the  only  one  left,  after  having 
eliminated  the  three  propositions  heretofore  named.  In  passing, 
1  might  mention  the  fact  that  the  New  Jersey  Act  was  fathered 
by  President-elect  Woodrow  Wilson,  of  New  Jersey.  That  Act 
is  the  fruit  of  his  long,  patient  study  of  this  subject,  and  is  his 
best  judgment  with  respect  to  this  matter. 

In  order  that  you  may  appreciate  the  standard  by  which  I 
have  measured  the  three  propositions  that  I  have  discussed,  and 
fully  understand  the  conclusions  that  I  have  reached  with  respect 


—  22  — 

to  them,  I  shall  now  state  what  I  consider  to  be,  and  what  every 
author  on  this  subject  considers  to  be,  the  primary  basic  principles 
of  every  Workmen's  Compensation  law  that  is  in  force,  and  that 
is  operating  satisfactorily  from  the  standpoint  of  employer,  em- 
ploye and  society  at  large.  These  basic  principles  are  as  follows, 
to  wit: 

First:     That  such  a  law  should  operate  to  do  PROMPT,  aver- 
age justice. 

Second:     That  it  should  operate  to  prevent  accidents. 

I  will  say  that,  as  incidents  to  these  propositions,  the  practical 
application  of  these  basic  principles  should  accomplish  the  fol- 
lowing very  desirable  objects,  to  wit: 

1.  Eliminate    litigation    over    personal    injury    damages,    and 
thereby  rid  society  of  the  "ambulance  chaser,"  the  "shyster"  and 
the   contingent  fee  doctor — all  of  whom  are  parasites. 

2.  Put   PROMPTLY   into  the   pockets  of  the   injured   employe, 
or  his  dependents   in   the   event  of   his  death,   reasonable  compen- 
sation for  the  loss  sustained,  without  any  diminution  in  transit. 

3.  Give  the  Injured  employe  immediate,   efficient  medical  at- 
tention as  and  when  the  same  is  needed. 

4.  Eliminate  strife   and   dissension   between   the  employer  and 
his  employes,  and  cement  a  bond  of  good  feeling  between  them. 

5.  Effectively    eliminate    State    and    county    expenses    in    the 
shape  of  court  costs  incident  to  this  class  of  litigation,  and  county 
expenses   incident  to   the   care   of   injured   employes   and    their  de- 
pendents who  have  heretofore  become  public  charges.     These  very 
desirable  objects  have  not  been  accomplished  under  the  Washing- 
ton  Act,   and  we  may   not  expect  them   to  be  accomplished    under 
any  modified  form  and   plan  of  the  Washington  Act,  as  has  been 
shown    by   the   records   of   the   courts   and    county   hospitals   of  the 
State    of    Washington    for   the    period    beginning    October    1,    1911, 
and   ended   January   1,   1913. 

6.  Effect  the  most  efficient  and  the  most  economical   admin- 
istration of  the  law. 

The  facts  that  I  have  submitted  constitute  clear,  strong  and 
convincing  proof  that  State-administered  insurance  of  Workmen's 
Compensation  as  attempted  under  the  Washington  Act,  and  as  is 
contemplated  in  three  of  your  bills,  is  an  absolute  failure  in  this 
country.  History  shows  that  it  has  been  a  failure  in  every  foreign 
country  that  has  adopted  this  system.  It  is  a  failure  from  an 
economic,  politic  and  social  standpoint,  because  it  is  socially, 


—  23  — 

politically,  morally,  economically  and  legally  unsound  in  principle 
and  practice. 

I  have  measured  the  Minor  Bill,  which  is  based  upon  the  New 
Jersey  idea,  by  the  same  standard,  and  find  that  it  contains  full 
measure  according  to  the  standard  that  I  have  outlined,  except  that 
it  is  compulsory  in  form,  instead  of  elective.  It  should  be  made 
elective,  both  as  to  employers  and  employes.  I,  for  myself  per- 
sonally and  for  my  clients,  insist  that  you  make  it  elective  in 
form,  if  you  conclude  to  recommend  its  adoption.  Should  you  in 
your  wisdom  conclude  to  recommend  its  adoption,  you  will  be 
following  in  the  footsteps  of  the  legislation  of  fourteen  of  our 
sister  States,  wherein  such  laws  have  been  passed  and  have  be- 
come effective.  You  will  be  following  in  the  footsteps  of  the 
commissions  appointed  by  Governors  of  the  States  of  New  York, 
Minnesota  and  Missouri — all  of  which  commissions,  after  an  ex- 
pensive and  thorough  investigation  of  this  question,  concluded 
that  the  facts  disclosed  by  the  practical  operation  of  the  Work- 
men's Compensation  Law  of  the  State  of  New  Jersey  proved  be- 
yond any  reasonable  doubt  that  the  New  Jersey  idea  is  by  far  the 
most  desirable  idea. 

The  Workmen's  Compensation  Law  of  the  State  of  New  Jersey 
is  not  found  wanting  in  any  particular  when  measured  by  the 
standard  by  which  I  have  measured  the  Washington  Act.  It  re- 
moves the  bone  of  contention  between  the  employer  and  the 
employe  as  to  the  amount  to  be  paid  in  case  of  accidental  inju 
by  fixing  that  amount  by  law.  It  places  the  liability  for  com- 
pensation  directly  upon  each  individual  employer,  thereby  increas- 
ing the  vigilance  on  his  part  to  prevent  accidents.  If  accidents 
do  not  occur,  the  employer  will  not  have  to  pay  compensation. 
Experience  has  shown  that  every  employer's  watchfulness  to  pre- 
vent accidents  is  increased  in  direct  proportion  to  his  direct 
liability.  This  fact  is  admitted  by  the  Industrial  Insurance  Com- 
mission of  the  State  of  Washington  on  page  299  of  the  commis- 
sion's first  annual  report,  where  we  find  this  recommendation  for 
amendment,  to  wit:  "First  Aid,  14  (A) — That  the  employer  in 
whose  plant  an  accident  occurs  shall  be  Habile  for  the  treatment 
cost  of  such  injury  in  an  amount  not  to  exceed  $100  the  intent  of 
such  provision  being  to  supply  an  injured  workman  immediate  and 


—  24  — 

competent  first-aid,  and  to  operate  in  reducing  preventable  acci- 
dents." 

If  a  direct  liability  in  the  sum  of  $100  will  operate  to  accom- 
plish this  result,  what  may  we  reasonably  expect  when  the  whole 
liability  for  compensation  is  placed  directly  upon  each  individual 
employer?  I  heard  the  one  single  employer  who  has  addressed 
these  committees,  and  who  has  advocated  a  jackpot  State  insur- 
ance scheme,  say  that  accident  prevention  was  a  very  secondary 
consideration  in  this  matter.  I  believe  he  is  mistaken.  Every 
employer  who  has  appeared  before  you  has  emphasized  the  point 
of  accident  prevention.  Every  author  who  has  written  on  this 
subject  has  agreed  that  accident  prevention  is  probably  the  very 
most  important  point  in  this  matter;  and  that  it  may  be  suc- 
cessfully accomplished  in  one  way  only,  i.  e.,  by  placing  the  whole 
liability  for  compensation  directly  upon  each  individual  empkyer. 

If  all  of  our  legislators  were  proposing  Workmen's  Compensa- 
tion laws  that  embodied  this  system,  we  should  not  have  any 
large  bodies  of  intelligent,  honest  and  courageous  employes  con- 
vening in  an  indignation  meeting  for  the  purpose  of  remonstrating 
against  this  class  of  proposed  legislation.  If  the  Washington 
Act  embodied  the  fundamental  principles  that  I  have  named,  you 
would  not  hear  me  raising  my  voice  in  depicting  the  deplorable 
conditions,  pernicious  practices  and  monstrous  tragedies  existing 
and  being  enacted  at  this  time  in  the  State  of  Washington,  under 
the  practical  operation  of  her  Workmen's  Compensation  Act.  For 
the  system  that  I  have  outlined  as  desirable  operates  to  do 
prompt  average  justice  and  to  prevent  accidents;  and  fully  accom- 
plishes all  of  the  enumerated  incidents  that  I  have  heretofore 
mentioned  in  connection  with  my  statement  of  the  fundamental 
basic  principles  of  every  good  Workmen's  Compensation  law. 

When  your  Minor  Bill  has  been  made  elective  in  form,  it  will 
"operate  in  the  same  manner  as  the  New  Jersey  Act,  and  accom- 
plish all  of  the  desirable  objects  and  purposes  of  that  act;  there- 
fore, it  is  the  only  proposition  that  you  have  submitted  to  you 
that  is  desirable. 

Every  employer  within  the  State  of  New  Jersey  whose  opera- 
tions come  within  the  scope  of  this  Act,  with  the  exception  of 
three  employers,  has  elected  to  accept  the  compensation  provisions 


—  25  — 

of  that  law.  Every  employer  in  that  State  who  does  not  feel  that 
he  is  financially  able  to  carry  his  own  risk,  purchases  a  Work- 
men's Compensation  policy  of  a  reliable  casualty  company  for  the 
benefit  of  his  employes;  retires  his  liabilities  on  account  of  Work- 
men's Compensation  from  year  to  year,  and  does  not  have  to 
worry  for  fear  that  the  Act  may  be  declared  unconstitutional 
by  any  court,  or  that  it  may  be  repealed  and  thereby  force  him 
into  bankruptcy  by  reason  of  an  enormous  volume  of  personal 
injury  damage  claims  and  suits.  This  accident  insurance  for  the 
benefit  of  his  employes  is  procured  at  a  reasonable  cost,  rated 
upon  the  hazard  of  his  risk,  and  its  practical  administration  is 
eminently  satisfactory  to  all  parties  concerned.  It  is  satisfactory 
to  the  employer  because  its  cost  from  year  to  year  is  definite.  It 
is  satisfactory  to  the  employe  because  he  receives  prompt,  fair 
and  equitable  compensation,  based  upon  a  reasonable  percentage 
of  his  loss  of  earning  capacity.  His  compensation  is  absolutely 
certain.  In  consideration  for  this  treatment,  and  in  consideration 
for  the  abrogation  of  his  employer's  common  law  defenses,  he  is 
satisfied  and  willing  to  accept  approximately  the  sum  of  50  per 
centum  or  his  loss  of  wages  for  the  periods  limited  by  law  in  the 
various  classes  of  injuries. 

Let  me  emphasize  the  fact  that  the  cost  to  the  employer  is 
such  that  the  employe  must  be  willing  to  share  a  fair  portion  of 
the  burden  if  the  employer  is  to  be  able  to  pay  the  compensation 
and  still  continue  to  operate  his  business.  If  the  burden  should  be 
made  so  heavy  that  the  employer  cannot  operate  his  business  ex- 
cept at  a  loss,  then  there  will  be  no  employment,  and,  therefore, 
no  necessity  for  compensation  to  injured  employes.  In  this  con- 
nection, I  might  state  that  one  large  industry  furnishing  em- 
ployment to  several  hundred  men  in  the  State  of  Washington 
was  offered  for  sale  on  account  of  the  passage  of  the  Washing- 
ton Act;  that  an  eastern  buyer  was  secured  who  was  willing  to 
buy  the  business  at  a  figure  representing  the  investment  of  ap- 
proximately $500,000.00  and  continue  to  operate  the  plant;  but 
that  upon  investigating  labor  laws,  he  discovered  the  Wash- 
ington Workmen's  Compensation  Act  and  promptly  refused  to 
negotiate  further  for  the  purchase  of  this  business,  or  any  other 
business  located  in  any  of  the  States  of  the  Northwest,  saying 


—  26  — 

that  his  reason  for  so  doing  was  the  fact  that  the  northwestern 
Sates  are  passing  through  a  period  of  "fads  and  fancies"  in  labor 
legislation,  and  that  he  and  his  associates  would  not  come  into 
any  of  these  States.  The  States  of  Montana  and  Idaho  should 
take  advantage  of  this  situation  and  enact,  safe,  sane,  workable 
Workmen's  Compensation  laws  that  will  invite  capital  to  develop 
your  wonderful  resources,  establish  new  industries,  multiply 
your  payrolls  and  increase  your  prosperity. 

The  employer  to  whom  I  have  heretofore  referred,  who  ad- 
dressed you  and  advocated  the  passage  of  a  law,  based  upon 
the  Washington  Act,  and  who  foolishly  stated  that  accident 
prevention  is  a  matter  of  little  importance,  also  dragged  an  en- 
tirely disinterested  party  and  an  entirely  immaterial  matter  into 
this  discussion,  i.  e.,  the  casualty  company  and  its  Employers' 
Liability  policy.  In  this  connection,  he  made  some  misstatements 
of  facts  that  warrant  me  in  making  an  explanation  in  order  that 
there  may  be  no  misunderstanding.  I  am  unable  to  design  his 
purpose  in  so  doing,  unless,  perhaps  he  did  so  for  the  purpose 
of  appealing  to  such  low  motives  as  Bias  and  Prejudice,  which 
motives  are  illusory  and  unreliable  for  the  reason  that  judgment 
based  upon  these  motives  is  usually  wrong.  I  am  certain  that 
these  motives  will  not  be  premitted  by  such  intelligent  men  as 
yourselves  to  enter  into  or  form  a  part  of  the  basis  of  your 
judgment  in  this  case. 

Now,  a  Workmen's  Compensation  policy  is  practically  the  same 
as  the  Workmen's  Collective  policy  that  has  been  written  by 
the  casualty  companies  for  a  number  of  years.  Whenever  I 
have  seen  the  Accident  Department  of  an  industrial  business  ad- 
ministered under  a  Workmen's  Collective  policy,  I  have  noticed 
that  all  of  the  desirable  objects  and  purposes,  contemplated  in 
your  Workmen's  Compensation  laws,  have  been  an  accomplished 
fact.  Every  employer  who  has  procured  such  a  policy  for  the 
benefit  of  his  employes  and  has  operated  his  business  thereunder, 
will  verify  this  statement.  Workmen's  collective  policies  and  Work- 
men's Compensation  policies  differ  from  Employers'  Liability 
policies  as  the  day  differs  from  the  night. 

I  am  now  speaking  from  actual  knowledge  of  these  matters, 
gained  from  several  years'  experience  in  the  administration  of 


—  27  — 

the  affairs  of  the  accident  departments  for  a  number  of  large  em- 
ployers in  Washington,  Idaho  and  Montana.  Workmen's  Col- 
lective policies,  provided  by  the  employer,  for  the  benefit  of  his 
employes  and  administered  directly  by  the  employer,  or  by  my- 
self as  his  Claim  Agent  or  Attorney,  have  always  produced  hap- 
piness, contentment  and  satisfaction  amongst  our  employes;  has 
entirely  eliminated  lawsuits  and  antagonism  between  employe 
and  employer;  and  has  cemented  a  bond  of  general  good  feeling 
between  these  employes  and  their  employers. 

A  workmen's  compensation  policy,  written  by  a  casualty 
company  under  a  workmen's  compensation  law,  may  be  expected 
to  accomplish  the  same  result  in  a  much  higher  degree.  What 
more  could  one  desire?  But  let  me  reassert  and  emphasize  the 
fact  that  this  condition  cannot  be  produced  through  the  medium 
of  State  administered  insurance  of  Workmen's  Compensation, 
under  which  system  a  political  machine  is  thrust  directly  between 
the  employe  and  his  employer.  Let  us  not  deceive  ourselves 
with  respect  to  this  important  matter. 

It  is  a  fact  that  the  New  Jersey  Act  has  operated  so  that  in 
less  than  one  per  cent  of  the  cases  wherein  an  injured  employe 
or  his  dependent  is  entitled  to  compensation  does  the  case  find 
its  way  into  the  courts.  The  bone  of  contention  between  the  em- 
ployer and  the  employe  has  been  removed,  therefore,  there  is 
little  excuse  for  litigation.  Formerly  New  Jersey  employers  did 
the  same  as  Montana  employers,  i.  e.,  they  purchased  Employers' 
Liability  policies  of  the  casualty  companies.  The  Employers'  Li- 
ability policy  is  written  exclusively  in  the  interest  of  the  employer. 

The  casualty  companies  are  not  to  blame  for  this  existing  evil 
condition,  which  we  have  already  agreed  should  be  abolished.  The 
fault  is  that  of  the  law  and  the  practice  thereunder.  Every 
casualty  company  in  America  agrees  with  us  that  the  fault  lies 
in  the  system,  and  they  also  agree  with  us  that  the  system  should 
be  changed  by  a  law,  the  form  and  plan  of  which  is  fair  and 
equitable,  and  the  practical  operation  of  which  will  accomplish 
the  greatest  good  to  the  greatest  number. 

I  was  living  in  the  State  of  Washington  when  this  Act  was 
born.  I  have  watched  its  wild,  mad  career  ever  since.  I  have 
seen  the  pernicious  practices  that  I  have  detailed — yes,  I  have 


—  28  — 

seen  tragedies  enacted  under  it.  Let  me  illustrate:  I  know  an 
illiterate  foreign  employe  who  was  injured  last  year  while  in 
the  course  of  his  employment  in  an  occupation  that  comes  within 
the  scope  of  the  Washington  Act.  Now,  his  case  was  an  ordinary 
case,  and  went  the  usual  routine.  He  had  little  money  and  few 
friends.  His  injury  confined  him  to  his  room  for  a  long  time. 
He  immediately  enrolled  in  the  Washington  Industrial  Insurance 
Commission's  Correspondence  School  in  his  attempt  to  prosecute 
his  own  claim  for  compensation.  In  passing,  I  might  add  that  the 
presentment  and  prosecution  of  such  claims  by  educated  and  in- 
telligent parties  who  may  represent  injured  employes,  has,  for 
some  unknown  reason,  been  frowned  upon  and  an  order  issued 
by  this  Commission  forbidding  this  practice. 

In  this  man's  case,  days  passed  by,  weeks  lapsed  into  months — 
long,  long  months.  As  the  pangs  of  hunger  gnawed  at  his  vitals, 
and  as  his  body  was  racked  by  pain  and  suffering,  in  his  agony 
he  began  to  meditate,  and  in  these  dreary  hours  of  meditation, 
he  began  to  make  a  mental  picture  of  the  Washington  Industrial 
Insurance  Commission's  office.  Being  somewhat  an  artist,  he 
then  took  his  pencil  and  transferred  this  mental  picture,  bit  by 
bit,  to  a  piece  of  wrapping  paper.  The  marvelous  result  is  a 
work  of  art.  I  named  it,  "One  Way  To  Run  A  Big  Business." 

This  sketch  partically  shows  three  sides  of  a  typically  pre- 
tentious government  building  that  is  labeled  the  "'Washington 
Industrial  Insurance  Office."  The  top  of  this  building  may  also 
be  seen,  and  on  the  top  we  observe  a  large  funnel  leading  into 
this  building,  and  this  funnel  is  surrounded  by  an  army  of  em- 
ployers and  taxpayers  who  are  industriously  shoveling  cash  into 
this  hopper.  On  the  left  may  be  seen  an  approaching  army  of 
lean,  inexperienced  incoming  politcial  appointees  to  take  up  the 
duties  of  the  administration  of  the  affairs  of  this  office.  On  the 
right,  we  behold  the  army  of  sleek,  well-groomed,  though  dis- 
consolate, retiring  political  appointees,  whose  fate  has  been  de- 
termined by  the  voters  at  the  polls.  In  the  foreground  may  be 
seen  an  army  of  poor,  pitiable  cripples  and  orphans  and  widows 
passing  out  from  this  mill.  They,  too,  appear  disappointed,  down- 
hearted, disconsolate  and  sad — in  a  measure,  that  beggars  descrip- 
tion— they  are  those  who,  after  having  written  and  written  and 


—  29  — 

written  to  the  officials  of  this  office,  pleading  for  immediate  re- 
lief and  prompt  assistance,  have  gone  in  person,  at  great  ex- 
pense and  inconvenience  to  themselves,  to  ascertain  the  cause 


of  delay,  and  if  possible,  to  obtain  the  benefits  to  which  they  are 
entitled  under  the  law,  or  at  least,  hasten  the  rendition  of  the 
commission's  final  judgment  of  award. 

Now,  this  is  a  pathetic  story,  and  the  scene  that  I  have  de- 
picted is  a  touching  picture  of  actual  life;  but  the  real  conclusion 
of  this  story  is  reached  when  this  poor,  illiterate,  though  intel- 
ligent and  gifted  foreigner,  who  had  lost  practically  the  entire 
sight  of  one  eye  as  the  result  of  the  injury  mentioned,  was  event- 
ually tendered  a  voucher  in  the  sum  of  $35.75,  intended  to  be 
full  and  final  payment  of  his  claim,  and  was  asked  to  sign  an  ac- 
quittance to  the  State  of  Washington,  ackowledging  payment  in 
full  for  the  injury  sustained  by  him. 

But  that  is  not  all,  for,  fortunately,  he  did  not  accept  the 
voucher  and  execute  the  release,  but  upon  the  counsel  and  ad- 


—  30  — 

vice  of  a  friend,  made  inquiry  of  this  commission  as  to  whether 
he  was  not  entitled  to  greater  compensation  for  such  an  injury. 
Considerable  pressure  has  to  be  brought  to  bear  upon  this  com- 
mission, in  order  that  this  man  might  receive  a  fair  amount  of 
compensation  to  which  he  was  justly  entitled  without  delay.  The 
sum  finally  agreed  upon  was  that  of  $750.00.  Now,  that  picture 
represents  the  enactment  of  a  monstrous  tragedy,  the  like  of 
which  is  no  doubt  being  enacted  daily  in  the  practical  operation 
of  the  Washington  Ast,  as  administered  by  a  political  board,  not 
governed  by  adequate  rules  of  limitation,  and  surrounded  by  con- 
ditions that  make  it  desirable  to  make  a  "good  showing." 

This  is  the  case  of  Dominic  Morelli  vs.  Industrial  Insurance 
Commission  of  the  State  of  Washington. 

Now,  I  have  heard  Mr.  Donahue,  the  Labor  Leader  on  this 
floor,  say  that  he,  for  himself  and  for  his  party,  is  willing  to 
concede  practically  everything  in  the  matter  of  mere  detail  in 
the  Murphy  Bill,  which  is  a  duplicate  of  the  Washington  Act,  ex- 
cept that  the  scale  of  awards  has  been  increased  by  fifty  per 
centum,  but  that  they  will  not  concede  the  PRINCIPLE.  That 
is  the  exact  position  of  every  labor  leader  from  the  National 
Federation  of  Labor  leaders  down.  That  principle  is  that  of 
idealism,  paternalism  and  socialism  engrafted  upon  a  political 
system  unfit  for  its  administration;  and  its  adoption  means  wreck 
and  ruin.  The  rank  and  file  of  common  labor  entitled  to  benefits 
under  such  an  act,  is  not  so  much  interested  in  the  matter  of  tKe 
principle  as  in  the  matter  of  the  practice  under  whatever  system 
you  may  adopt.  The  common  laborer  is  intensely  interested  in 
this  point,  and  is  willing  to  concede  the  objectionable  principle 
and  the  pernicious  practices  entailed  by  its  adoption,  if  he  be  given 
a  system,  the  administration  of  which  results  in  prompt,  fair 
and  equitable  justice  and  forces  his  employer  to  be  extremely 
careful  of  the  life  and  limb  of  his  employes.  I  have  submitted 
the  clearest,  the  strongest  and  the  most  convincing  proof  of  this 
fact. 

In  conclusion,  I  desire  to  state  for  myself  personally,  for  my 
clients  who  are  employers,  and  for  their  employes,  that  we  are 
unalterably  oposed  to  every  plan  of  State  administered  insurance 
of  Workmen's  Compensatidn  on  account  of  the  deplorable  facts 


—  31  — 

that  my  investigation  has  disclosed  with  respect  to  the  operation 
of  such  laws,  and  for  the  reason  that  we  firmly  believe  such 
laws  to  be  inimical  to  the  general  welfare  of  employers,  employes 
and  society  at  large.  For  myself  personally,  for  my  clients  and 
for  their  employes,  I  shall  say  that  we  are  heartily  in  favor  of  a 
Workmen's  Compensation  law  in  substantially  the  form  and  plan 
of  the  Workmen's  Compensation  Law  of  the  State  of  New  Jersey, 
for  the  reason  that  such  a  law  will  be  a  desirable  and  permanent 
piece  of  remedial  legislation,  and  that  its  practical  operation  will 
be  an  inestimable  benefit  to  all  parties  concerned.  In  the  interest 
of  the  citizenship  of  the  great  and  prosperous  State  of  Montana, 
I  appeal  to  you  at  this  time  to  let  your  verdict  in  this  all-im- 
portant matter  be  based  upon  good  judgment.  Recommend  a  safe, 
sane,  workable  Workmen's  Compensation  bill  that  may  become 
a  law,  and  it  will  stand  as  a  memorial  to  your  wise  judgment. 


THIS  BOOK  IS  DUE  ON  THE  LAST  DATE 
STAMPED  BELOW 

AN  INITIAL  FINE  OF  25  CENTS 

WILL  BE  ASSESSED  FOR  FAILURE  TO  RETURN 
THIS  BOOK  ON  THE  DATE  DUE.  THE  PENALTY 
WILL  INCREASE  TO  SO  CENTS  ON  THE  FOURTH 
DAY  AND  TO  $1.OO  ON  THE  SEVENTH  DAY 
OVERDUE. 


r 


17  1944 


LD  21-100m-7,'40 (6936s) 


Gay  lord  Bros. 

Makers 
Syracuse,  N.  Y. 

PAT.  JAM.  21. 1908 


416801 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 


